Kevin Thompson: Increased demand for all lumber-based building materials, including flooring, finally caught up with a dramatically reduced supply from the sawmill industry. There is significantly less sawmill capacity in operation than there was five years ago.

Dan Natkin: Raw materials are a huge challenge in this segment currently. It is a combination of reduced sawmill capacity from the downturn, a rising new home construction market and demand for the material in other segments such as container floors and crane mats. In the end, pricing has been depressed in this category for so long, price increases are inevitable.

Harry Bogner: With the increase in the builder market, many companies began to prepare for the current year by buying up lumber. Most companies prepare for the year by buying lumber later because it lines up with how a typical season will roll. People decided to buy ahead of that but we had a wet fall and winter which hampered logging. Plus, demand for lumber is now up 40 percent over what it was a year or two ago.

Milton Goodwin: Demand for hardwood flooring increased and accelerated, especially in the latter half of the 4th quarter. There was an unforeseen lumber demand in the summer months and suppliers were not able to load up fast enough. When demand really started to accelerate, there was snow on the ground and suppliers couldn’t react fast enough. Demand went into hyper-acceleration in the first and second quarters of this year — up around 20 percent. A terrible winter plus the damage of Hurricane Sandy in the northeast drove demand and housing starts up. The overall economy is improving but we couldn’t get into the forests where a majority of the wood is harvested because we had one blizzard after another, and exports rose. There was a perfect storm of demand, struggles with harvesting and exponential lumber inflation.

What are the other challenges being faced?

Kevin Thompson: In 2013, this issue has been further compounded by record-breaking rainfall throughout the wood basket (an area in the Upper Mid-Western and Northern Appalachian areas where the vast majority of hardwood lumber comes from) along with continued increased demand.

Milton Goodwin: The challenge for the remainder of the year will be profitability, availability and keeping up with lumber demand and cost of raw materials. Other lumber products are also feeling the price pressure, such as 2 x 4’s and soft woods like plywood — it’s not just hardwood flooring. Even in laminate the cost of HDF core-boards has risen.

Harry Bogner: Historically, whenever the economy has come out of a recession and new home construction has been impacted we’ve seen the same cycle. However, this time was different because the recession caused such a deep trough that we have to dig out of a bigger hole. We’re still dealing with same struggles in 4th quarter of last year.